We will review the coal business in the year 2010. National coal production increase and expectations of rising demand in global markets makes the industry in this sector never lost interested. Not only local investors but also foreign.

Indonesian Coal Mining Association (APBI) believed that the local coal production this year as a whole could reach 250 million tons. That number increases, where coal production in 2010 is expected to reach 270 million tons.

On the other hand, countries exporting energy resources, now visible from taking a position in Indonesia. One was China, which will begin to look to coal mining companies in the country for cooperation. In addition to meet the needs of fuel for electricity, as well as to diversify its foreign exchange reserves.

Let’s say China Investment Corporation (CIC) which signed an investment agreement worth U.S. $ 1.9 billion or approximately USD 19 trillion in a format similar debt instruments to PT Bumi Resources (BUMI).
As one of the largest investment institutions and the world’s leading, CIC see business prospects are promising coal in Indonesia. EARTH management in addition to the IDX information stated the transaction was not material because the form of refinancing transactions (refinancing), so this investment is not considered a new loan.
The remaining funds will be used for expansion of coal production is now Earth is 60 million tonnes to 100 million tons (2011-2012).

Loan guarantees in the form of shares in the company EARTH coal (estimated KPC and Arutmin)
Local companies did not want to miss. One of them is PT AKR Corporindo (AKRA) which is currently doing due diligence process of PT Anugrah Karya Raya, which moves in the mining sector.
This action to support the expansion in the future. On May 5 last, lien agreements AKRA shares of PT Jakarta Tank Terminal (JTT) associated with underwriting transactions credit facility of U.S. $ 60 million.
It also sparked interest in the positive performance shown some issuers of coal in the ground water. One of them shares of PT Indo Tambangraya Megah (ITMG), which in the first half yesterday, was also quite positive, with net profit rising 129%. Then the business margin increased from 19% to 32%, while average selling price (ASP) rose from U.S. $ 60 to U.S. $ 79 per ton.
Vice President, Research & Analysis Valbury securities Nico Omer Jonckheere still recommends buying shares of some coal, related to the increase in leverage biggest coal prices. He also ITMG price target to reach USD 41,700. Investors can buy on weakness at the level of Rp 24,200, he explained.

Other stocks are recommended Nico PT Adaro Energy (ADRO), following the company’s plan to obtain a loan of U.S. $ 500 million from the syndication of local banks and 12 foreign and possible purchase of 3 million tons of coal ADRO by Indonesia Power to meet the needs of 3400 MW power plant in front. We recommend a buy with a target price of Rp 2675, he said.

According to him, the company’s performance posiitif enough, with a net profit of 1507% increase, with business margin increased from 21.4% to 38.2%. In addition, the company also plans to acquire coal mines owned by BHP Billiton and increase production to 80 million tons / year.

Coal business will be more developed, new investors will enter the coal business. Buying and selling of coal in Indonesia will get better, with the supply of coal for local needs and to export coal to Overseas. We, also coalinvestors.com Finding New Investors on Business Coal, for it please contact us for details.

JAKARTA, Nov 19 (Reuters) – Indonesian plans to cap coal exports to meet domestic demand will not hit global supplies in the near term, but could start to bite in three to five years as new power plants stoke demand in the world’s biggest exporter of thermal coal. Here is a snapshot of Indonesia’s coal industry.

RESOURCES :

Indonesia has total identified coal resources of 104.76 billion tonnes, with 86.61 percent consisting of low-quality coal of below 6,100 kcal/kg on an air-dried basis. It has mineable reserves of 20.99 billion tonnes. About 99 percent of the identified coal resources are located on the island of Sumatra and in the South and East Kalimantan provinces of Borneo. The rest is scattered on other islands. But coal resources are expected to rise further, as big areas such as Papua, have been largely unexplored.

EXPORTS Indonesia, the world’s biggest exporter of thermal coal, ships more than 70 percent of coal to the Asian market, with Japan the top buyer. Other key buyers include Taiwan, South Korea and India. The remainder is exported to Europe and America. Indonesian sub-bituminous coal is being increasingly used by power plants in major buyers since its low content of sulphur and ash makes it more environmentally friendly. Indonesian coal exports rose to 140.5 million tonnes in 2008, from 38 million tonnes in 1997.

DOMESTIC CONSUMPTION :

Electricity accounts for about 60 percent of Indonesia’s total domestic demand for coal, or 68 million tonnes this year. The use of coal for power generation is expected to increase in line with the government’s crash programme to add 10,000 Megawatts (MW) of generating capacity to ease chronic power shortages, with the first phase due to be completed in 2011 and consisting of coal-fired power plants.

INFRASTRUCTURE :

Indonesia is an archipelago of more than 17,000 islands and this allows it to easily increase coal shipments using waterways. Most coal mines in South and East Kalimantan are located near rivers or the open sea. There are plans underway to expand or build more onshore coal terminals, including one in West Java, with annual handling capacity of 5 million tonnes from Sumatra. State-owned coal miner PT Tambang Batubara Bukit Asam Tbk ( PTBA.JK: Quote, Profile, Research ) is an exception and it uses a railway to transport coal from its mine in Tanjung Enim in South Sumatra. In the future, railways may become a key mode of transport, with a number of projects in the pipeline. The government plans a 1,461 km (908 miles) railway in Kalimantan, Indonesia’s key coal producing area in Borneo. Bukit Asam also has approval for a 302-km rail line connecting its mine in Central Bangko in South Sumatra to the port of Lampung, on the tip of Sumatra island. [ID:nJAK347673] RAK Minerals & Metals Investments, a UAE investment fund, will also spend $1 billion to develop a rail link and terminal to ship coal from East Kutai, in East Kalimantan. [ID:nSP409627] Sources: Reuters, Energy and Mines Ministry, Indonesia Coal Producers Association ( Reporting by Fitri Wulandari; Editing by Ed Davies and Clarence Fernandez ) news sources from reuters india